With the liberalization of Indian economy, last few years have seen considerable
growth in import and export volumes. With the new modes of transportation and
increase in international trade and containerisation, the ports were getting
congested. Further, with widespread industrialization and economic growth, the
imports for use in hinterland and exports originating from there have increased
over time. It was difficult for importers or exporters based in the hinterland,
to come to a gateway port for clearance of imported or export goods. With the
development of multi-modal transport system with its stress on greater
facilitation to importers/exporters, a need was felt to develop Inland Container
Depots (ICDs) or Container Freight Stations (CFSs). These were to essentially
function like a dry port. These ICDs/CFSs were to function as common user
facilities offering all the services for Customs clearance like any other port.

An Inland Container Depot (ICD)/ Container Freight Station (CFS) may be
defined as :-
"A common user facility with public authority status equipped with fixed
installations and offering services for handling and temporary storage of
import/export laden and empty containers carried under Customs transit by
any applicable mode of transport placed under Customs control. All the
activities related to clearance of goods for home use, warehousing,
temporary admissions, re-export, temporary storage for onward transit and
outright export, transhipment, take place from such stations."

To monitor the growth of ICDs/CFSs, a regulatory authority in the form
of an Inter-Ministerial Committee (IMC) under the chairmanship of the
Additional Secretary(Infrastructure), Ministry of Commerce, has been set up.
It comprises representatives from the Department of Revenue, Ministry of
Surface Transport, Ministry of Railways and the Ministry of Commerce. The
Committee considers the proposals submitted by Public Sector as well as
Private Sector entrepreneurs for setting up of new ICDs/CFSs at different
centres in the country and monitors their progress. There were about 30
ICDs/CFS prior to constitution of the IMC. After its constitution in the
year 1992, the IMC has approved about 135 ICDs/CFS and out of total 165
ICDs/CFSs, about 100 are reported to be already in operation and others are
in pipe line.

An ICD is a place where containers are aggregated for onward movement to
or from the ports whereas CFS is a place where containers are stuffed, unstuffed and aggregation/segregation of cargo takes place. ICDs are
normally located outside the port towns whereas no site restrictions apply
to CFS. An ICD may have a CFS attached to it. CFS is treated as an extension
of a port/ICD/air-cargo complex.

The proposal for setting up of ICDs/CFSs are examined by the IMC on the
basis of following guidelines:

Feasibility report: A survey/feasibility study must precede the
setting up of ICDs/CFSs and copy of the report should invariably
accompany the application for setting up such a facility. The facility
has to be economically viable for the management and attractive to
users, to the railways for full train movements; and to other transport
operators; shipping lines; freight forwarders, etc.
In the background of growing international trade, the infrastructure
facilities have to precede the actual generation of demand. This is
particularly important, as such facilities have a long gestation period
for being fully operationalised. For approval of an ICD/CFS, following
minimum level of traffic volume is prescribed:
For ICD - 6,000 TEUs per year (Two way)
For CFS - 1,000 TEUs per year (Two way)

Land requirements: For the ICDs/CFSs proposed to be set up outside
limits of major cities, a minimum of 3 acres of land is required and for
such facilities inside city limits /port area, a minimum area of 1 acre
(about 4500 sq. mts) is required.

Design and Lay-out of ICD/CFS: The design and lay-out should be the
most modern & state-of the-art, equipped with mechanical/electrical
facilities of international standards. The lay-out should allow smooth
flow of containers, cargo and vehicles through the ICD/CFS and it should
take into account initial volume of business, estimated volume in 10
years and the type of facilities exporters would require.

Equipping the ICD/CFS: The ICD/CFS should plan for the most modern
handling equipment for loading, unloading of containers from rail flats,
chassis, their stacking, movement, cargo handling, stuffing/de-stuffing,
etc.

Rail head ICDs: The parties desirous of setting up a rail based ICD,
have to provide at their own cost all infrastructure facilities
including land, track, handling equipment for containers, maintenance of
assets including track, rolling stock, etc. as per extant railway rules
applicable to private sidings.

Tariff :Tariff structure and costing is to be worked out as a part
of the feasibility study .

General: The main function of an ICD/CFS being receipt, despatch and
clearance of containerised cargo, the need for an up-to-date inventory
control and tracking system to locate containers/cargo is paramount.
Each functional unit of the facility (e.g. siding, container yard, gate,
stuffing, de-stuffing area etc.) should have uptodate, and where
possible online information about all the containers etc., to meet the
requirements of customers, administration, railways etc.

Application(8 copies) in prescribed form along with the copies of
feasibility reports mentioned above are to be submitted to the
Infrastructure Division in the Ministry of Commerce, Udyog Bhavan, New
Delhi. The applicant should send a separate copy of application to the
jurisdictional Commissioner of Customs. The Commissioner of Customs is
expected to examine the proposal on the basis of guidelines and send his
comments to the Central Board of Excise & Customs, North Block, New
Delhi within 30 days.

On receipt of the proposal, the Ministry of Commerce sends a copy of
proposal to each of the IMC members. The proposals are then discussed in
the IMC meeting.

The proposals for setting up of ICD/CFS is considered on the basis
of prescribed guidelines and cleared on merits by the IMC

On acceptance of a proposal by the IMSC, a letter of intent is
issued to the applicant by the Ministry of Commerce.

The applicant is required to set up the infrastructure within one
year from the date of approval. The time period of one year can be
extended by another 6 months by the Ministry of Commerce. A request for
extension beyond 6 months needs approval from IMC.

After issuance of letter of intent, the facility is notified as an
ICD under section 7 (aa) of the Customs Act, 1962 by the Department of
Revenue. In case of CFSs which are considered as extension of
ports/ICDs/air-cargo complexes, notification under section 7(aa) is not
required.

Once required infrastructure for an ICD/CFS is developed, a
notification under section 8 of the Customs Act declaring the facility
as a custom area is issued by the jurisdictional Commissioner of
Customs. The operators of the ICDs/CFSs are appointed custodians under
section 45 of the Customs Act, 1962, provided they satisfy the
conditions relating to development of infrastructure & facilities and
furnish bonds and securities as laid down for such purpose in the CBEC
Circular No.128/95-Cus., dated 14.12.95. Custodians are responsible for
safety and security of the goods stored in their ICD/CFS.

For the purpose of Customs clearance at the ICDs/CFSs, Customs staff
is provided at the ICD/CFS on cost recovery basis. The sanction for
posting of officers is issued by the Administrative Wing of the Central
Board of Excise & Customs. The custodians are required to pay @ 185% of
total salary of officers actually posted at the ICD/CFS. Normally, 13
officers (1 Assistant/Deputy Commissioner, 2 Appraisers, 2 Inspectors, 2
UDCs, 2 LDCs, 4 Sepoys) are posted at an ICD/CFS having both import and
export. The ICD/CFS having only export is given 7 officers (1
Assistant/Deputy Commissioner, 1 Appraiser, 1 Inspector, 1 UDC, 1 LDC, 2
Sepoys).

In the initial stages of operations of an ICD/CFS, due to less volume
of trade, full strength of the officers may not be required. In such a
situation, if the custodian requests, the Commissioner of Customs may,
after due consideration post the officers in less than the sanctioned
strength in the said ICD/CFS. Gradually, when the business picks up at
the ICD, the full contingent of staff may be posted. The Commissioner of
Customs also would accept the deposit of advance cost recovery charges
for three months for the number of staff which will be actually posted
in an ICD/CFS.

Exim Guide

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